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Business > 1.2 Types of Organizations > Flashcards

1.2 Types of Organizations Flashcards

1
Q

What is sales revenue? What is the formula?

A

The money earned from selling a company’s products. Price x quantity sold

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2
Q

What is cost?

A

Production Expenditures

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3
Q

What is profit?

A

The money leftover after all expenses have been paid.

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4
Q

What is a private sector?

A

The part of the economy operated by private individuals aiming to generate profit, without control by the government.

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5
Q

Features of private sector?

A
  1. Private ownership and control
  2. Little or no government involvement
  3. Profit is earned by owners
  4. Funded privately
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6
Q

Roles of private sector?

A
  1. Creating employement
  2. Helping growth and development of the economy
  3. Providing variety of goods and services
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7
Q

What is a public sector?

A

Part of the economy that is owned or funded by the government to provide goods and services for the benefit of society.

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8
Q

Features of public sector?

A
  1. Financed either by taxes or government
  2. Owned or controlled by government
  3. Provides essential goods and services for the public
  4. The public can chose to disagree or agree with the goverments decisions
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9
Q

Roles of public sector?

A
  1. To ensure that everyone has access to basic healthcare,education parks
  2. To stabilize the economy
  3. To protect citizens and organizations through police and court
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10
Q

What are for profit commercial enterprises?

A

A business organization whose primary goal is to generate profit by providing goods or services. These profits are typically reinvested or distributed to the owners or shareholders.

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11
Q

What are the 4 for profit commerical acitivty parts?

A
  1. Sole traders
  2. Partnerships
  3. For profit publicly held companies
  4. For profit privately held companies
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11
Q

What is a sole trader?

A

A business owned and managed by one individual, who is personally responsible for all aspects of the business. Full control over decision-making and keeps all profits, unlimited liability, meaning personal assets may be used to cover business debts.

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12
Q

What is limited liability?

A

Limited liability means that the owners or shareholders of a business are only responsible for the company’s debts up to the amount they have invested in it. Their personal assets are protected and cannot be used to pay off the business’s debts beyond their initial investment.

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13
Q

What is unlimited unliability?

A

Unlimited liability means that the business owner are personally responsible for all the debts and financial obligations of the business. If the business cannot pay its debts, creditors can pursue the owner’s personal assets such as savings, property, or other belongings to cover the shortfall.

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14
Q

Advantages of sole traders?

A
  1. Few legal formalities
  2. Being your own boss
  3. Privacy
  4. Quicker decision making
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15
Q

Disadvantages of sole traders?

A
  1. High risks
  2. Workload and stress
  3. Limited source of finance
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16
Q

What is a partnership

A

Partnerships are owned by two or more persons (known as partners).
At least one partner must have unlimited liability.

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17
Q

What is a deed of partnership?

A

A deed of partnership is a legally binding agreement between partners in a business that outlines the terms and conditions of their partnership.

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18
Q

Advantages of partnerships

A
  1. Financial strength
  2. Specialisation and division of labour
19
Q

Disadvantages of partnerships

A
  1. Unlimited liability
  2. Prolonged decision making
  3. Lack of harmony (disagreements)
20
Q

What is a limited liability company?

A

A limited liability company (LLC) is a type of business structure that combines the benefits of limited liability protection with the flexibility of a partnership or sole proprietorship. In an LLC, the owners (called members) are not personally liable for the company’s debts and obligations beyond their investment in the business.

21
Q

What is a privately limited company?

A

A private limited company (Ltd) is a type of business structure in which ownership is limited to a small group of private shareholders, such as family members, friends, or close associates.

22
Q

What is a joint stock company?

A

A joint stock company is a type of business where multiple people can invest money by buying shares.

23
Q

What is an incorportated business?

A

A company that has gone through the legal process of incorporation, which means it is recognized as a separate legal entity from its owners.

24
Q

Advantages of limited liability company

A
  1. Tax benefits
  2. Productivity
  3. Economies of scale
25
Q

Disadvantages of limited liability company

A
  1. Communication problems
  2. Loss of control
  3. Bureaucracy (complex administrative processes)
26
Q

Two important documents for limited liability companies

A
  1. Memorandum of association - a brief document outlining the details of a company
  2. Articles of association (incorporation) long document talking about the internal regulations and procedures of a company
27
Q

What is a public limited company?

A

A Public Limited Company (PLC) is a business entity whose shares are freely traded on public stock exchanges and can be owned by the general public.

28
Q

What is flotation?

A

When a publicly held company first sells all or part of its business to external investors. The process is called an IPO.

29
Q

What is a social enterprise?

A

A social enterprise is a business organization that aims to address social, environmental, or community issues while operating with a sustainable business model.

30
Q

What is a for profit social enterprise?

A

Revenue generating enterprises with social objectives at the core of their operations.

31
Q

Benefits of social enterprises

A
  1. Create employment
  2. Run in a transparent way
  3. Benefit people in society rather than just society and shareholders
32
Q

What is the private sector for profit social enterprise?

A

Businesses that aim to generate profits while simultaneously addressing social, environmental, or community challenges. Unlike non-profits, these enterprises seek financial returns but prioritize social impact alongside profitability.

33
Q

What are the 3 aims of the triple bottom line?

A
  1. Economic Aim
  2. Social Aim
  3. Environmental Aim
34
Q

What is the Public sector for-profit social enterprises?

A

A public sector for-profit social enterprise is a business entity owned, controlled, or significantly influenced by the government that aims to generate profits while delivering social, environmental, or public benefits.

35
Q

What are cooperatives?

A

Cooperatives (or co-ops) are member-owned and member-controlled businesses that operate for the mutual benefit of their members.

36
Q

What are the 3 types of cooperatives?

A
  1. Consumer cooperatives
  2. Worker cooperatives
  3. Producer cooperatives
37
Q

What is a worker cooperative?

A

Worker cooperatives are set up, owned and organized by their employee members.

37
Q

What is a consumer cooperative?

A

Consumer cooperatives are owned by the customers who buy the goods and/or services from cooperatives for personal use.

38
Q

What is a producer cooperative?

A

Producer cooperatives are cooperatives that join and support each other to process and/or market their products. For example farmers.

39
Q

Advantages of cooperatives

A
  1. Decision making power
  2. Public support
  3. Incentives to work
40
Q

Disadvantages of cooperatives

A
  1. Limited sources of finance
  2. Slower decision making
  3. Limited promotional oppertunities
41
Q

What does STEEPLE stand for?

A

Social, Technological, Economic, Environmental, Political, Legal, Ethical

42
Q

What is a non profit social enterprise?

A

Non-profit social enterprises are businesses run in a commercial-like manner but without profit being the main goal.

43
Q

What is a non govermental organization?

A

Private organizations that pursue activities to relieve the suffering, promote the interest of the poor, protect the environment, provide basic social services or undertake community development.

44
Q

Factors that affect the types of business entities

A
  1. Amount of finance
  2. Size
  3. Degree of ownership and control
45
Q
A

Business (3 decks)

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